When Does The Fair Work Act Reach Overseas?

Whether the Fair Work Act 2009 (Cth) applies is usually straightforward when the employer is Australian, and the employee is an Australian resident or holds the appropriate visa; the contract was signed in Australia and all work is completed in Australia.  As soon as any of these factors change, whether the Fair Work Act applies can be less clear, therefore when there is uncertainty, it is important to determine whether the employee is eligible for coverage.

What is the Fair Work System?

The Fair Work System encompasses the Australian workplace relations system created by the Fair Work Act 2009, including the minimum employee entitlements set out in the National Employment Standards; laws; regulations, and instruments such as:

• Awards;
• Certified Agreements; and
• Enterprise Bargaining Agreements.

The Fair Work Act provides for the administration of the Fair Work Act by establishing and conferring functions on the Fair Work Commission and the Fair Work Ombudsman.

Who is covered by the Fair Work System?

If the employer and the worker are Australian, the contract is made in Australia and income tax on the income must be paid in accordance with Australian laws, then the worker is usually covered by the Fair Work system – even if all work is carried out overseas.  This means that regardless of where a worker is physically located, their entitlements under the Fair Work System remain unchanged.  It is important to note that each State and Territory also has its own industrial system which excludes some workers from the National Fair Work System.

Employees who physically complete their work in Australia, including relevant visa holders, are usually covered by the Fair Work system even if they are hired by a foreign owned company.  Likewise, the holder of a working visa who signs an employment contract overseas to perform work in Australia for an Australian employer will be entitled to the full benefit of the Fair Work System.

All workers covered by the Fair Work System are entitled to the minimum entitlements set out in the National Employment Standards and if applicable, the relevant Award or Enterprise Bargaining Agreement.  There does not need to be a written employment agreement or contract – but the employee must receive at least their minimum entitlements under the National Employment Standards.

Australian-based employees are entitled to all minimum entitlements under the National Employment Standards, however, to be entitled to protection from unfair dismissal and stand down, the employer must be an Australian entity. When considering whether the Fair Work System will reach overseas, a major factor will be whether the employer is Australian, but it is common for employers and employees to mistakenly think that the Fair Work System does not apply at all because the work is completed overseas, or the employer has a human resources office in another country.

Employment relationships can be complex, and the above information relates to the general application of the Fair Work Act 2009, which does not contemplate unique circumstances and factors outside of the primary factors discussed above.  Where there is uncertainty, qualified advice specific to the circumstances should be sought to ensure that all obligations under the contract are met.